Feb 27 2014, 12:15pm CST | by Forbes
Ebay shares have soared since Icahn released an open letter attacking the company on February 24th. Since the first letter, eBay shares have jumped more than 7.5% percent. That’s resulted in a paper gain of about $450 million for Omidyar, eBay’s founder, chairman and–with more than 105 million shares–eBay’s largest stake holder.
Icahn, who owns about 2% of eBay, has made roughly $108 million since releasing his letter to Ebay Share holders in which he accused eBay’s board members (Marc Andreessen and Scott Cook ) of placing their interests ahead of shareholders, and competing directly against eBay. Icahn wants two board seats, and is pressing eBay to spin off its fast-growing PayPal division
Despite the gains, Omidyar wants Icahn to be quiet and go away. This morning Omidyar publicly backed eBay board members (Andreessen and Cook), supported the leadership of eBay CEO John Donahoe and encouraged that eBay and PayPal stay together. Naturally, Icahn responded with another letter. His inital attack has ignited a full-blow paper war between him and ebay, with each side trading verbal blows via press release. The more mud that is slung, the higher eBay’s stock price goes.
As I wrote in my recent FORBES cover story about PayPal –ebay is at a critical juncture. The race is on to control mobile payments and the upside remains enormous: Humans made $15 trillion worth of retail transactions in 2013. Giants such as Apple , Amazon, Googl e Visa and MasterCard all want to be your mobile digital wallet, as do several well-financed startups, including Square, founded by Twitter billionaire Jack Dorsey .
Icahn is not the only one who thinks PayPal must be spun-off from eBay. Elon Musk (Telsa, SpaceX) and David Sacks (Yammer) who where both executives at PayPal believe the company and eBay should break up. Says Musk “It doesn’t make sense that a global payment system is a subsidiary of an auction website… It’s as if Target owned Visa or something.” Musk said adding that PayPal “will get cut to pieces by Amazon payments or by other systems like Apple and by start-ups if it continues to be part of eBay.”
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